British BBQs Fail To Light Up Retail Sales

Thursday, 19 July: Sterling can’t seem to catch a break at the moment. Political uncertainty is hanging over the currency, and doesn’t look to be going anywhere fast. Yesterday’s inflation data gave it another little jab, but today’s retail sales really gave it another beating. Sales in June fell 0.5% vs May with a fall in clothing and footwear sales offsetting a rise in food sales as Brits enjoyed the recent heatwave. Sales in the 3 months to June grew 2.1%, further giving the Bank of England food for the thought amid the expected rate rise next month.

Sterling’s dip below $1.30 continued over the course of the day, sitting at $1.2284 at the time of writing, down 0.72%. The usual correlation between a weaker pound and stronger FTSE 100 wasn’t as evident, the blue-chip index rising 0.1% at the close after a rather quiet day. In stock specific stories, Sports Direct (FTSE 250) fell 7.13% after reporting an £85m write-down on its stake in Debenhams. In the sport retailer’s full year announcement, pre-tax profit fell 72% while revenue rose 3%. Babcock beat Sports Direct to the wooden spoon, falling 8.77% after revising its revenue guidance lower. The British support-services group has cited that defence revenue will be hit due delays in UK defence activity although revenue in the aviation and nuclear sectors look to be unchanged. The group has secured c.83% of expected revenue for fiscal 2019.

President Trump’s trade war talks weighed on global equity sentiment with many Asia indices ending lower. French and German indices didn’t fair too much better, with the export heavy German DAX closing 0.61% lower, although European car makers shrugged off Trump’s tariff threats. Trump is threatening 20-25% tariffs on imported cars. US indices were down around a quarter of percent at the time of writing.

This next story seems easier to summarise in bullet points, so here it goes:

  • US media giant Comcast has dropped its pursuit of 21st Century Fox’s film and television assets.
  • Disney are now the sole bidder (for Fox) after previously outbidding Comcast $71bn vs $65bn.
  • Comcast has said it wants to focus solely on taking full control of Sky (it currently holds 39%). Fox and Comcast are in a bidding battle with Comcast increasing its offer for Sky to £26bn, while Fox had previously raised its bid to £24.5bn.
  • Rupert Murdoch controls both Comcast in the US and Sky in the UK.
  • Comcast shares rose 2.9% on the news; Fox’s fell 1.2%. Sky shares closed 1.47% lower.

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